The Goods and Services Tax (GST) collection for the month of February 2023 was Rs 1.49 trillion, which is 5% lower than the previous month’s collection of Rs 1.56 trillion. However, this figure is in line with the average monthly collection of Rs 1.5 trillion, indicating stabilization in the indirect tax levy as well as normalization of economic activities. The collections were aided partly by higher inflation, according to data released by the finance ministry on Wednesday.
The central GST was Rs 27,662 crore, state GST was Rs 34,915 crore, integrated GST Rs 75,069 crore (including Rs 35,689 crore collected on import of goods), and cess Rs 11,931 crore (including Rs 792 crore collected on import of goods). The finance ministry noted that February typically sees lower revenue collection due to it being a 28-day month. However, the mop-up in February this year was 12.4% higher than the Rs 1.33 trillion collected in February 2022, and it registered the fourth-highest GST collections in the current financial year.
The government settled Rs 34,770 crore to Central GST and Rs 29,054 crore to state GST from integrated GST as regular settlement. The total revenue of the Centre and states after regular settlements in February 2023 was Rs 62,432 crore for CGST and Rs 63,969 crore for SGST. The Centre released the balance GST compensation of Rs 16,982 crore for June 2022 and Rs 16,524 crore as arrears to six states and UTs based on figures certified by their respective accountant generals. Revenue from import of goods was 6% higher, and revenue from domestic transaction (including import of services) was 15% higher compared with a year ago.
February’s GST collection indicates that the Centre is on track to meet its targeted revenue from the levy this fiscal. With a recovery in economic activities and higher than expected nominal growth, the government has hiked the GST target for the current fiscal to Rs 8.54 trillion in the revised estimate from Rs 7.8 trillion, which was initially budgeted.
Chief economist and head of research & outreach at Icra, Aditi Nayar, said the sequential dip in the GST collections in February was partly on account of the boost to the January figure from the quarter-ending inflows (for the month of December, which were remitted in the following month). “We expect the FY23RE for CGST collections to be met. However, there could be some shortfall in direct taxes relative to the FY23 revised estimate,” Nayar said.
Saurabh Agarwal, tax partner at EY, noted that the monthly revenue marks over Rs 1.4-trillion collection for straight 12 months in a row. “February 2023 being a month of 28 days, the collection is much in line with the new normal of GST revenue of Rs 1.5 trillion. This is a likely indicator that the Indian economy remains much stable compared with global cues,” he said.
Among states, the GST collection revealed a mixed trend with several of them reporting receipts less than the 12% growth on an all-India basis. Chhattisgarh and Gujarat saw an 8% growth in GST collections each in February 2023, Odisha 10%, and Chandigarh and Himachal Pradesh 5% each. Meghalaya was the only state that reported a 6% contraction in GST revenues in February 2023 compared with a year ago. Among major states, Andhra Pradesh reported a 39% increase in GST collections on an annual basis, Goa 35%, Jammu and Kashmir 33%, Bihar 24%, Haryana 23%, Tamil Nadu 19%, Karnataka 18%, Jharkhand 17% and Maharashtra 15%.”
